Saturday, January 16, 2021
  • About
  • Advertise
  • Careers
  • Contact
Pension Changes
  • Home
  • Government Policy
  • Pension Changes
  • Pension Information
  • Pension Rights
  • Retirement Pension
No Result
View All Result
Pension Changes
Home Pension Rights

FRR faces liability changes in COVID-19 social security debt plan | News

June 11, 2020
in Pension Rights
FRR faces liability changes in COVID-19 social security debt plan | News
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter

FRR, France’s €33.4bn pension reserve fund, faces an extra drawdown of at least €13bn plus acceleration of a scheduled liability as part of a government plan for dealing with deficits in the social security system as a result of the coronavirus pandemic.

Unveiled last month with corresponding draft legislation, the government’s plan is for €136bn of social security debt to be transferred to Cades, the public body responsible for paying off such debt.

According to credit rating agency Fitch, the €136bn includes €31bn in accumulated social security deficits as at the end of 2019, and projected deficits for 2020-2023 of €92bn.

It also includes €13bn corresponding to one-third of French hospitals’ debt, with Fitch noting that this would be the first time that the French state would use Cades to financially support hospitals in the country.

The government’s plan also involves extending Cades’ lifetime – the debt amortisation date – from 2024 to 2033.

The link with FRR is a function of this postponement. Following a major pension reform in 2010, FRR has since 2011 been paying €2.1bn to Cades every year to support the amortisation of debt incurred by the social security system.

The last payment is currently due in 2024, but in the draft legislation introduced last month the government is proposing that FRR be required to continue annual payments to Cades, albeit for €1.45bn rather than the current €2.1bn.

The extension of FRR’s allocation to Cades is foreseen “to the extent that a significant portion of the current or future debt relates to the pension regimes”.

According to the government, the proposal would see FRR making the revised annual payment until 2033 – meaning €13.05bn in extra payments – “or until reserves are exhausted”.

CNIEG liability to be accelerated

A second proposed measure affecting FRR involves the bringing forward of a scheduled payment to CNAV, the national old-age insurance fund.

FRR has been due to make the payment, in one or several instalments, potentially from this year, but the government wants to see it paid by the end of July at the latest.

In the text of the draft legislation, the government said this was because there was a need to “rapidly improve the cash situation” in the general social security regime given pressures brought on by the COVID-19 pandemic.

The payment in question represents the value of assets FRR has been managing on behalf of the CNAV since a 2005 reform of the pension scheme for the electricity and gas sector, which that year became affiliated to the general regime in France.

Accrued pension rights were transferred from the Caisse nationale industries électriques et gazières (CNIEG) to CNAV, and participating employers had to make a balancing payment in cash. It is part of this that FRR has been managing for the benefit of CNAV since then.

The amount of FRR’s CNIEG liability is not fixed in law, but depends on investment performance.

According to the text of the bill, as at the end of April the market value was €4.9bn. The government is proposing that the value be fixed as at 29 May, and that its calculation would be subject to review by FRR’s auditors.

The draft legislation has this week been reviewed by a special parliamentary committee, which has proposed amendments but none appearing to affect the changes facing FRR.

FRR recently had to rein in plans to shift to a new investment model as a result of the coronavirus and president Emmanuel Macron’s decision to suspend the pension reform alongside other reforms. This week the French media have been reporting and weighing comments from Macron’s entourage that the president wanted to pick up the reform “in part”.

To read the digital edition of IPE’s latest magazine click here.

— to www.ipe.com

Related posts

Law, Practice and Precedents (8th Edition)

Law, Practice and Precedents (8th Edition)

January 15, 2021
Guest comment: Credit where it’s due

Guest comment: Credit where it’s due

January 15, 2021
Previous Post

Elementary Teacher Defeats West Virginia’s State Senate President in Primary – Politics K-12

Next Post

Alberta NDP introduces bill to reverse teachers’ pension transfer to AIMCo

Next Post
Alberta NDP introduces bill to reverse teachers’ pension transfer to AIMCo

Alberta NDP introduces bill to reverse teachers’ pension transfer to AIMCo

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

RECOMMENDED NEWS

Dutch social partners call for ‘transition regime’ to new pensions contract | News

Dutch social partners call for ‘transition regime’ to new pensions contract | News

4 months ago
House Bill Promises Free Coronavirus Treatment, Pension Aid

Pandemic Puts More Stress On Struggling Pension System

7 months ago
EU staff don’t lose their pensions for criticising the EU

EU staff don’t lose their pensions for criticising the EU

10 months ago

Ball Aerospace Supports Preliminary Design Review for NASA’s SPHEREx Mission

1 month ago

FOLLOW US

  • 79 Followers
  • 27.6k Followers
  • 40.7k Subscribers

BROWSE BY CATEGORIES

  • Government Pension Policy
  • Pension Changes
  • Pension Information
  • Pension Policy
  • Pension Rights
  • Retirement Pension
  • Uncategorized

BROWSE BY TOPICS

2021 2021 Pensions auto-enrolment age 18 auto enrolment pension contributions 2021/22 auto enrolment rates 2020/21 auto enrolment rates 2021/22 cashing in pension at 55 cashing in pension calculator cashing in small pension pots CCP retirement check my state pension Disabled pensions drawdown employer pension contributions 2021/22 government policy examples uk list of government policies uk minimum pension contributions 2021 minimum pension contributions 2022 new state pension Pension age pension issues pension ombudsman pension plan pension regulator Pensions Advisory Service Pensions Brexit pension scheme uk Pensions outlook retirement 2 million scams scheme funding Single mothers pensions State Pension State Pension age state pension changes state pension forecast State Pensions State triple lock taking pension at 55 the pensions regulator Therese Coffey uk pension age UK State Pension uk state pension age what is government policy uk

POPULAR NEWS

  • Multiemployer pension reform not happening this year

    Multiemployer pension reform not happening this year

    5 shares
    Share 0 Tweet 0
  • Exit payment cap: Implications for the LGPS

    0 shares
    Share 0 Tweet 0
  • Public Service Pensions Update | October 2020

    0 shares
    Share 0 Tweet 0
  • NEST: More than a pension | Country Report

    0 shares
    Share 0 Tweet 0
  • Builders were not self-employed, rules employment tribunal

    0 shares
    Share 0 Tweet 0

Follow us on social media:

Recent News

  • Law, Practice and Precedents (8th Edition)
  • State pension payments can be received while working – will more tax need to be paid?
  • What is the average UK retirement income?

Category

  • Government Pension Policy
  • Pension Changes
  • Pension Information
  • Pension Policy
  • Pension Rights
  • Retirement Pension
  • Uncategorized

Recent News

Law, Practice and Precedents (8th Edition)

Law, Practice and Precedents (8th Edition)

January 15, 2021

State pension payments can be received while working – will more tax need to be paid?

January 15, 2021
  • About
  • Advertise
  • Careers
  • Contact

© 2020 Please contact us on partnership@pensionchanges.co.uk if you would like to reach our audience.

No Result
View All Result
  • Home

© 2020 Please contact us on partnership@pensionchanges.co.uk if you would like to reach our audience.